Why Nine-tenths of Enterprises Fail

“The beginning is the most important part of the work.”

Plato

All business owners and even employees should think big and make plans for expansion. In order to start a job, a strong reason, in other words a source of motivation, is required. This part requires thinking big, and unfortunately most people fail at this step.

Ray Kroc, unlike most people, was able to think big and realize his plans. He got into the hamburger business. But if he had chosen another business, he would probably have done well there too. Many small business owners tend to keep their business small. Ray Kroc developed a system for his small business, then expanded his hamburger business into a huge company.

The triangle below is the one that Robert T. Kiyosaki often emphasizes in his books. The purpose of this triangle is to help focus thoughts and teach the eight main topics that will make a business successful.

Statistics show that, nine out of ten businesses fail in the first five years. Nine-tenths of businesses that can continue for more than five years end before they see the tenth year. Here is the 90/10 rule of money again.

Many business ventures fail because at least one of the eight sections in Kiyosaki’s triangle is weak or lacking in these ventures.

A Business Needs A Very Strong Mission to Be Successful

In the triangle, the “product” is uppermost; but it has the smallest area. The “mission” is at the bottom but is one of the three items with the largest area. Mission is at the base of the triangle. Undoubtedly, the most important item in this triangle is mission.

I’ve heard a lot of people who want to be entrepreneurs say, “I have a great idea.” These great ideas sometimes have a chance to come true. The world is full of great products that have failed. This is because the base of the triangle is not strong. When you ask those who want to be entrepreneurs about their mission, most of them answer you: “I’ll make money!” If the focus is on making money rather than enterprise, the result is likely to be disappointing.

Mission is the most important thing to the business. Mission is the soul and heart of a business. The lack of Mission, means the lack of power to tackle tough road to tread.

When the most successful businesses studied, you’ll see a well-based and solid triangle. Their mission is motivating, leadership is well executed, managers are competent and work in harmony, cash flow and finances are good, sales and marketing communication are effectively provided, the system established for employees works efficiently, legal documents and contracts are clear and understandable, and of course the product produced – as a result of all of them – very good.

The System Is a Major Difference Between Small Businesses and Big Businesses or Companies

Most of us can make more delicious burgers than McDonald’s burgers. But how many of us can build a better system? The system is a crucial difference between small businesses and big businesses. In small businesses, the owner of the business is the system itself. Things don’t work out in his absence. Many businesses operate in this way depending on people.

Big businesses and companies operate on their well-designed systems. Employees or leaders can change over time. However, thanks to the system, the same process continues. McDonald’s works the same all over the world.

When businesses with well-educated, high-salary, hardworking employees who still achieve little are analyzed, it is seen that these businesses depend on people. A system has not been developed for these enterprises. Even a business with well-educated and highly paid employees will fail unless there are well-functioning systems.Entrepreneurs are the people who have to build great racing cars. CEOs are the pilots of those cars. A great pilot can’t win a race with a bad car. There are very few people who produce racing cars and become their drivers at the same time. Bill Gates, Michael Dell and Steve Jobs are such people. We’ve seen these guys all building and driving excellent racing cars.

You may also read my THE DIFFERENCE BETWEEN YOUR WORK AND YOUR BUSINESS post if you are interested.

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The Two Most Important Skills to Increase Your Income

Whenever I talk to someone who wants to make more money, I always tell them the same thing: You have to think about your life in the long term. Instead of just working to earn money and secure their future, which is undeniably important, I tell them to find a second job that will allow them to learn a second skill. If what they want is to train themselves in sales, I often recommend them to work in a large networked marketing company, namely in the multi-level marketing field. Some such companies offer unique training programs to help people overcome the fear of disgrace and rejection, which is the primary reason people fail.

In the long run, education is worth more than money.

The reaction of those is usually, “Oh, but this is a lot of trouble.”. I ask them: So, is it better to give half of your lifetime earnings to the government?

And some of them say, “All I want is to do the job that interests me.”. I tell these people that I’m not interested in going to the gym, but I do, because I want to feel good and live longer.

There is unfortunately some truth to the saying, “You can’t teach an old dog new tricks”. If the person is not used to change, it is difficult for him to change.

Some people make excuses if you talk about trying to learn something new. They don’t like to struggle. However, life is like going to the gym. Everything gets easier once you walk through the door. I get lazy to go to the gym many times. But after I get there and start exercising, I enjoy it. Finally, I leave the gym thinking that I am glad I came.

Rather than specialize in something, diversify your abilities. Know little about a lot. And always try to work with people who are smarter than you.

How many of us can make burgers better than McDonald’s? I guess everyone would say they could do better. So, if we know how to make better burgers, how come McDonald’s make more money than us?

The answer is obvious: McDonald’s is excellent in business. The reason so many talented people are poor is that they give all their attention to making burgers and not to establish a business order.

The world is full of talented poor people. They either struggle with financial difficulties or earn less than they deserve. Because they focus on making better burgers rather than improving their burger selling and serving skills. McDonald’s doesn’t make the best burgers in the world. However, no one gets even close to McDonald’s when it comes to selling and serving an ordinary hamburger.

Do not let your field of expertise trap you.

I know teachers who make hundreds of thousands of dollars a year. The reason they earn so much is because they have skills other than skills in their field. Apart from teaching, they also know about sales and marketing. In my opinion, there is no more important skill than sales and marketing. Acquiring sales and marketing skills is the nightmare of many people who are afraid of rejection. The more successful they are to communicate, negotiate and overcome their fear of rejection, the easier sales and marketing will be for them.

Specialization has both advantages and disadvantages. I have friends of genius, but they are incapable of communicating properly with others, and as a result, their income is very low. If they take the time to learn how to sell, their communication skills will improve even if they don’t make any money in the process. This is invaluable.

We need to be good teachers as well as good students, salesmen, and marketers. In order to be really rich, we must know whether to give or receive.

The poor always say: “If I had some extra money, I would donate it.”. They work harder to earn more money. But they ignore the most important rule of money: “If you give it, you get it.“. They think the rule is, “If you get it, you give it.”.

Are you interested? I think you should also read WHY YOU NEED TO INCREASE YOUR FINANCIAL IQ.

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